Meeting Old Challenges in the New Normal

So it’s more or less official: the recession ended in June 2009. Anyone watching IT departments this year could have told you that. When the economy ramps up, there’s a shift in focus from cost savings and maintenance (back when I was an IT manager, we called it “bunker mode”) to innovation that moves the business forward. And in 2010 we’ve certainly observed that. IT departments are concentrating not only on streamlining operations and lowering costs—an absolute mandate of the recession—but also on innovation that leads to better business operations, greater productivity, and increased revenues—a clarion call of recovery. Now, this innovation can be in business practice or improved technology—and most likely both—but it almost always begins with IT. Streamlining IT functions, managing assets carefully, and ensuring uninterrupted operations can lower costs, increase reliability, and free resources for research, development, and innovation.

So it’s back to business as usual running IT departments and data centers in an expanding recovery, right? Wrong.

While the economy was changing, our venerable theorems about what drives the economy were staying the same, presenting IT and data center management now with a new set of old problems. Take for example, outsourcing–sending work outside a local economy to other economies where the requisite highly skilled labour was available at a lower price. Before the recession, outsourcing was all the rage. During the recession, less work was available, and so outsourcing seemed to cool a bit. Now that the recession has ended, we’re looking at outsourcing again as a way to increase innovation and keep costs in check. Because inflation—even the specter of inflation—is a recovery’s worse enemy.

But those old familiar places to which we used to outsource have moved. Adam Smith—that old supply and demand wild man—was at work all through the recession, and now that we’re ready to ramp up outsourcing again, we find that the economies to which we used to outsource are often no longer all that much of a bargain. So IT and data center management are faced with pressure to innovate, which requires highly skilled workers, a shifting and most likely shrinking pool of those highly skilled workers at a reasonable price, and a continuing mandate to control costs.

So what to do?

In a word, automate. In The Lexus and the Olive Tree, Thomas L. Friedman explained that the only way to increase productivity while keeping inflation in check is automation—building procedures into our infrastructure to reduce the amount of human intervention required. And to truly lower costs, the automation must be not only flexible and integrated, but also truly intelligent. It has to provide more than automated responses to discreet incidents; it must also analyze those automated responses in the aggregate, identify trends, and alert IT staff not only of potential systemic problems but also of policy-based resolutions. That’s what Cisco considers intelligent automation.

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